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Bahrain Telecom Pricing

International BenchmarkingDecember 2018

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• Report overview 3

• PSTN basket results for GCC countries, including time series 4

• Mobile basket results for GCC countries, including time series 7

• Fixed broadband results for GCC countries, including time series 10

• Mobile broadband results for GCC countries, including time series 13

• Leased line results for GCC countries, including time series 16

• Aggregate residential basket analysis 18

• Aggregate business basket analysis 20

• Summary of findings 22

• Acronyms used in the context of this report 23

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CONTENTS OF THIS REPORT

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REPORT OVERVIEW

• This report focusses specifically on Bahrain retail prices for telecommunications services incompared to GCC countries, Arab average and OECD average.

• The services covered in this report are the same as the services covered in the main AREGNETreport, namely:

• Fixed voice (PSTN)

• Mobile telephony

• Fixed Broadband

• Mobile Broadband

• Leased lines

• In addition, aggregate analyses have been included, to illustrate the likely total costs faced byconsumers and businesses separately who subscribe to a number of communications services. Inthis analysis, 3 types of user have been defined for consumers; with low usage, medium usageand high usage, and 2 types of user for businesses; medium and high usage.

• All the results contained in the report are derived directly from data from the main AREGNET study,which is based on OECD methodologies, and which uses data gathered in January 2018.

• References to both GCC and Arab averages are included, for comparison. Where relevant theOECD average is also shown

• The results are shown in US$/PPP, based on exchange rates taken from oanda.com as of 1st

January. The PPP conversion uses World Bank “Comparative Price Levels” from 2016.

• An overview of the study methodology, as well as a description of the baskets considered withineach service can be found in a separate document*

* AREGNET Price Benchmarking Methodology 2018

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PSTN RESIDENTIAL BASKETS

• Bahrain has the lowest fixed charge for residential telephone lines for the

lowest two baskets, and has the lowest overall cost. As usage increases, it

falls down the ranking slightly, but is still very close in cost to the overall

cheapest.

• Bahrain is below the OECD average for the two lowest residential baskets. It

is also lower than the GCC average at all usage levels. When compared to

the Arab average, Bahrain is either on par or below the average.

• The Batelco tariff with unlimited on-net calls benefits higher usage baskets.

Many of the other GCC countries already have lower or “free” fixed line

calls.

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PSTN BUSINESS BASKETS

• Bahrain has the lowest fixed charge for business telephone lines, but has relatively high calling

charges (especially for domestic fixed-to-fixed calls). In spite of this, Bahrain is performing well for

both the low usage (100 calls) and high usage (260 calls) basket, with the lowest overall cost.

• Usage charges will escalate much faster with usage in Bahrain than in the other countries, meaning

that for usage above approx. 500 calls Bahrain will be more expensive than some of the other

countries.

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PSTN BASKETS TIME SERIES FOR BAHRAIN

• PSTN pricing in Bahrain has been static since 2013 for most users.

• Prices have remained competitive during this time, compared to other GCC

countries.

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MOBILE BASKETS WITHOUT DATA

• Bahraini operators compare less favourably to the GCC

average for lower usage baskets, and for the very low

usage basket are almost the most expensive of the GCC

providers. As usage increases, however, the position of

Bahrain becomes much more competitive, due to the

prevalence of tariffs with higher upfront rental with high call

allowances/free calls.

• Bahrain is significantly above the OECD average, for both

low and high usage tariffs. A number of GCC countries are

closer , at low usage, but as usage increases, the position

for these countries relative to the OECD average worsens.

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MOBILE BASKETS WITH DATA

• For lower data (and call) usage, Bahraini operators are typically

somewhat less competitive across the GCC, with both providers

sitting mid-range. Costs are on par with the GCC average but

much higher than the OECD average.

• As data usage increases, prices in Bahrain become much more

competitive. For the 300 calls+1GB basket, the Bahraini

operators feature as the cheapest and the third cheapest across

the GCC countries. For the 100 calls+2GB basket, the Bahraini

operators rank in 3rd and 4th place respectively.

• For lower usage, a small number of GCC operators are on par

with the OECD average, but, as usage increases, the OECD is

consistently much lower than GCC operator costs.

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MOBILE BASKETS TIME SERIES FOR BAHRAIN

• Following a more volatile shift in prices in the previous year, as the Bahraini operators focused on plans including relatively high

data allowances, prices have either been much more stable, with either no or limited increases, and for very high usage a

decrease in costs.

• The large decrease in the high usage basket is as a result of the introduction of an unlimited on-net calls and SMS option from

Viva on its postpaid LTE plans, which helped reduce costs. In particular in Bahrain, there is little provision in mobile operator plans

for SMS options. This is countered by high data allowances, however.

• For all of the baskets including data, with the exception of the highest use basket (900 calls + 2 GB), the cheapest plan is the same

(although for the 300 calls + 1GB, there are some additional overage charges because of the high number of voice minutes in the

basket. This illustrates the shift towards higher included allowances, and higher monthly rental.

• Since 2008, mobile costs excluding data have fallen by 6% on average. Mobile costs including data have fallen on average by

19% since 2013 (when data costs first started being tracked).

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FIXED BROADBAND BASKETS, RESIDENTIAL TARIFFS

• Bahrain generally has very favourable fixed broadband pricing across the

GCC countries, with costs for residential users among the lowest across

the 6 countries.

• For 10-30 Mb/s and 30-100 Mb/s, Bahrain has the cheapest overall offers

across the GCC.

• Mena in Bahrain offers an LTE-based, high speed service at low cost, in

the range 30-100 Mb/s. Batelco has a similarly priced offer but at a lower

speed (in the speed range 10 - 30 Mb/s). For higher speed services, the

cost of Batelco rises, but even for high speeds, it is broadly on par with the

cheapest offers.

• The OECD average is generally lower than both the GCC and Arab

averages, particularly for the high speed basket, however, Bahrain is not

signifcantly higher than this average for the M2-M4 baskets.

• The results shown, including average results are for medium usage

• OECD Medium baskets are used (M1-M5), with increasing speed and

usage requirements.

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FIXED BROADBAND BASKETS, BUSINESS TARIFFS

• In contrast to the residential tariff basket results, the position of

Bahrain when based on business services is a little more

variable.

• For speeds up to 10 Mb/s, Bahrain (Batelco) has the cheapest

offering, while in the 10-30 Mb/s and 30-100 Mb/s range,

Batelco is second most expensive. In spite of this, for the 30-

100 Mb/s range, Bahrain is the overall cheapeast country, as a

result of the very low cost LTE-based offer from Mena.

• In general, there is a fundamental difference between prices for

business services in Arab and OECD countries.

• The results shown, including average results are for medium

usage

• OECD Medium baskets are used (M1-M5), with increasing

speed and usage requirements.

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FIXED BROADBAND BASKETS TIME SERIES FOR BAHRAIN

• Since 2013, residential fixed broadband prices in

Bahrain have fallen dramatically across all speed

ranges, with the biggest falls being seen in the period

2013-2015

• Since the last update, however, residential costs have

either remained flat, or fallen.

• There is a fundamental difference in offers from

Batelco, which are mainly distinguished by speed,

and offers from Mena, which are mainly distinguished

by data allowance.

• Business fixed broadband prices in Bahrain have

remained flat across all speed ranges since 2017.

• Although there have been changes to pricing – for

example, the extension by Batelco to its range of

offerings, including broader bundled plans, and

increased speeds – these did not impact the results.

• The Mena services have a nominal speed in the 60-

70 Mb/s range.

• Actual experienced speed may be lower.

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MOBILE BROADBAND BASKETS, RESIDENTIAL TARIFFS

• Tariffs specifically in the speed range 2-8 Mb/s are no

longer available in Bahrain, and no results in this

speed range are shown..

• For both the high speed (>8 Mb/s) baskets, and when

all speeds are considered, Bahrain is the third

cheapest of the GCC countries for low usage, just

behind Qatar. For high usage, it is the cheapest.

• The OECD average is lower than the Arab average

and the GCC average for both high speed (>8 Mb/s)

baskets, and when all speeds are considered.

• Bahrain is on par with both the Arab and the GCC

averages, but much higher than the OECD average.

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MOBILE BROADBAND BASKETS, BUSINESS TARIFFS

• Tariffs specifically in the speed range 2-8 Mb/s are no

longer available in Bahrain.

• Bahrain is generally very competitive among the GCC

countries for mobile broadband

• Bahrain has the cheapest overall offer for both the high

speed (>8 Mb/s) baskets, and when all speeds are

considered, for both low and high usage.

• Similar to the residential basket, Bahrain is on par

with the Arab and the GCC averages, but much

higher than the OECD averages.

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MOBILE BROADBAND BASKETS TIME SERIES FOR BAHRAIN

• Low speed residential services are no longer available in Bahrain.

• Higher usage is more likely to see more change in pricing over time, however, since 2017, both

residential and business pricing has been largely unchanged, with the exception of the removal of

lower speed services.

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LEASED LINE BASKETS

• The position of Bahrain among its peers varies, depending on the speed of the circuit

• For both the 64 Kb/s basket and the 256 kb/s basket, Bahrain is the cheapest of the GCC countries.

• For the 2 Mb/s basket, Bahrain is the most expensive of the GCC countries.

• For the two of the three baskets that feature Bahrain, only two other countries publish leased line

prices – Oman and UAE. For the 2 Mb/s basket, in addition to Bahrain, Oman and UAE, pricing for

Kuwait is now also.

• Prices for circuits above 2 Mb/s are not available for Bahrain.

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LEASED LINE BASKETS TIME SERIES FOR BAHRAIN

• The prices for leased lines in Bahrain have not changed since first Arab Price Benchmarking Study in

2008

• Over the past few years, fewer operators publish leased line pricing, and this move away from

published prices is expected to continue.

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RESIDENTIAL AGGREGATE BASKET ANALYSIS

• A simple aggregation of services for residential use has been constructed, based on three separateusage profiles, as follows:

• Low user: low usage across fixed and mobile voice, and with a requirement for only basic fixed broadband

• Medium: a user who makes modest use of fixed and mobile voice and broadband services

• High: a more intensive user, with high use of services, and with a requirement for higher broadband speeds than a medium user

• Each user profile has been costed by taking the result for each individual service basket, and summingto produce a total cost. This is a relatively simplistic method for considering multiple service use,however, it provides an indication of likely overall costs that different types of users will face.

PSTN Mobile voice Fixed broadband

20 calls 30 calls + 100MB L2: 2-10Mb/s, 5GB

PSTN Mobile voice Fixed broadband Mobile broadband

60 calls 100 calls + 500MB L3: 10-30Mb/s, 10GB all speeds, low usage

PSTN Mobile voice Fixed broadband Mobile broadband

140 calls 300 calls + 1GB H4: 30-100Mb/s, 200GB all speeds, high usage

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RESIDENTIAL AGGREGATE BASKET RESULTS

• Bahrain is the cheapest across the 5 GCC countries for each of the low, medium and high residential baskets.

• For the low use basket, costs in Saudi Arabia, and Oman are on par with Bahrain.

• As usage increases, the cost difference between Bahrain and the other GCC countries increases.

Results include any adjustment due to reduced cost where the fixed broadband offer includes fixed voice service.

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BUSINESS AGGREGATE BASKET ANALYSIS

• Similar to the approach for residential use, a simple aggregation of services has been constructed for business use, based on two separate usage profiles, as follows:

• Medium: a user who makes modest use of fixed and mobile voice and broadband services

• High: a more intensive user, with high use of services, and with a requirement for higher broadband speeds than a medium user

• The business profiles are similar to the residential profiles but use the business baskets (and businesspricing) for fixed voice, and business pricing for fixed broadband. As many business users will useresidential services for mobile, the results used for mobile voice and broadband services consider bothbusiness and residential offerings.

• Each user profile has been costed by taking the result for each individual service basket, and summingto produce a total cost. This is a relatively simplistic method for considering multiple service use,however, it provides an indication of likely overall costs that different types of users will face.

PSTN Mobile voice Fixed broadband Mobile broadband

100 calls (business) 100 calls + 500MB L2: 2-10Mb/s, 5GB all speeds, low usage

PSTN Mobile voice Fixed broadband Mobile broadband

260 calls (business) 300 calls + 1GB M3: 10-30Mb/s, 25GB all speeds, high usage

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BUSINESS AGGREGATE BASKET RESULTS

• For medium business use, Bahrain is thecheapest of the GCC countries.

• For high business use, Bahrain is the secondmost expensive country in the GCC, belowOman, just below the GCC average.

• Due to some business tariffs not beingpublished in Qatar/some services beingunavailable, Qatar has been excluded fromthe business results..

Results include any adjustment due to reduced cost where the fixed broadband

offer includes fixed voice service

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SUMMARY OF FINDINGS

* Only 2 Mb/s speed can be compared with the OECD data

Bahrain results compared to

GCC averages

Bahrain results compared to

Arab averages

Bahrain results compared to

OECD averages

PSTN (Low usage)

PSTN (High usage)

Mobile (Low usage)

Mobile (High usage)

Fixed broadband (Low speed)

Fixed broadband (High speed)

Mobile broadband (Low usage)

Mobile broadband (High usage)

Leased lines *

Better than …

On par with …

More expensive than …

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ACRONYMS USED IN THE CONTEXT OF THIS REPORT

• OECD: Organisation of Economic Co-operation and

Development

• OECD countries: Australia, Austria, Belgium, Canada,

Chile, Czech Rep., Denmark, Estonia, Finland, France,

Germany, Greece, Hungary, Iceland, Ireland, Israel,

Italy, Japan, Korea, Luxembourg, Mexico, Netherlands,

New Zealand, Norway, Poland, Portugal, Slovak Rep.,

Slovenia, Spain, Sweden, Switzerland, Turkey, UK,

USA

• AREGNET: Arab Regulators Network.

• AREGNET member countries: Algeria, Bahrain,

Comoros, Djibouti, Egypt, Iraq, Jordan, Kuwait,

Lebanon, Libya, Mauritania, Morocco, Oman,

Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria,

Tunisia, UAE, Yemen

• PPP: Purchasing Power Parity, exchange rates

adjusted for the purchasing power of consumers in

each country. Used in international comparisons to

adjust for market differences.

• Service: A telecommunications service

• Basket: A theoretical usage profile describing the

usage volumes across different types of calls and/or

different kinds of usage. The basket includes all

important elements of the service, including fixed cost

elements.

• Tariff: The description of all the end user prices related

to a service

• Tariff element: The part of a tariff describing the

price(s) for a single type of call or service component.

• Basket calculation: The process where the Basket is

applied to the individual tariff in order to calculate the

cost of the individual tariff elements and the overall

cost.

• Basket result: The cost of using the service as

described in the Basket.

• Re-balancing: The process through which the prices

are changed so that individual Tariff elements will cover

their own cost, and not subsidise other Tariff elements

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Thank you